Murphy's Mart By The Numbers

At the end of 1973 there were 22 Murphy’s Marts in operation, most of which were in G.C. Murphy’s western Pennsylvania home territory. Even in this core market - the “Heart of Murphyland” as it were, the company’s late entry into discounting had put them at a major competitive disadvantage, especially in relation to Kmart, whose presence in all of Murphy’s key areas now well established. Added to that was the general economic situation of the day, with no foreseeable end to rampant inflation. The combination of the poor mid-70’s economy with an oversupply of loosely managed, poor performing discount chains would soon precipitate an industry shakeout, affecting names mentioned here many times before– Topps/White Front, Turn-Style, and closer to home, longtime variety store competitor W.T. Grant. All in all, Murphy’s found itself in a most challenging environment.

Nevertheless, the company now appeared ready to cast its lot with the Marts, and a major ramp-up of new store openings would soon be underway. Twenty-plus stores had taught the company a major lesson, however – that in many cases, the typical 80 to 100,000 square foot Murphy’s Marts were too large for their respective trade areas. To rectify this, the company came up with a scalable concept to be used for all Murphy’s Marts going forward. Four basic store footprints were developed and described by the company in 1973.

The “900” series signified the “heavyweights of (Murphy’s) store mix”, being the largest Marts at 98,000 square feet. These were free-standing units, paired with a 30,000 square foot top-name supermarket to create a “true one-stop shopping complex”, and were reserved for the company’s most densely populated markets. The larger floor space would “accommodate broader selections and trade-up priced merchandise at competitive discount prices”. Next were the “800” series stores, 88,000 square foot units that would either be either free-standing or would “anchor a mall-type shopping center”, the company’s preferred setting for the “800” stores, “where available”. Then came the “700” stores, similar in all respects to the “800” stores except for their smaller square footage of 66,000. Here again, mall locations were Murphy’s preference. The company was careful to point out that the “700” stores offered “substantially the same selection of merchandise as the larger ‘900’ and ‘800’ series”, only in smaller quantities. It’s clear that Murphy felt that the “700” stores hit the proverbial sweet spot, and would “play a significant role in (their) future expansion plans”, and that “Present experience, though limited, seems to indicate “700” series Marts are more economical than larger Marts yet are still capable of high volume retailing”. More problematic were the 45,000 square foot “600” series Marts, which “were initially conceived as ‘swing stores’, and could be operated as Murphy’s Marts in some locations and as conventional (G.C. Murphy-branded) stores in others”. (Hey, Pennsylvania’s a “swing state”, isn’t it?) The dual branding idea was scrapped and whatever “600” stores were opened did so as Murphy’s Marts, although their similarity in size to the company’s variety stores led in many cases to customer confusion.

With the new store formats set, the company turned its focus to making up for lost time, rolling out new Murphy's Marts at a much faster pace than before. In 1976-77 alone, 56 new Marts were opened, forty of which were former W.T. Grant locations, picked up in the wake of that company's tragic bankruptcy in 1975. Many of these Grants locations were located in the Southern states. The company was unable, however, to leverage the famous G.C. Murphy name - one of their key strategies in building up the Marts in the Eastern and Midwest states - in the new Southern market areas, due to the relative paucity of G.C. Murphy stores in the Southeast and the fact that their Southwestern stores still went under the Morgan & Lindsey name.

Even in their strongest markets, though, the "Murphy's" name recognition factor was a double-edged sword. The book "For the Love of Murphy's" by Jason Togyer mentions customer frustration with the G.C. Murphy variety stores' higher pricing level as compared to the Murphy's Marts, and the fact that they weren't allowed to return or exchange merchandise purchased from one chain at the other's stores. Several retired Murphy's executives are quoted on this issue, ruefully noting that S.S. Kresge did not experience the same problem. Kmart was different enough in name and meteoric enough (how's that for a measurement?) in its success that the Kresge/Kmart association was largely forgotten in the minds of most consumers by the mid-1970's. And it didn't help that Murphy's newspaper ads continued to routinely promote both chains' sales in the same space, a practice that was finally scuttled in 1979.

By the end of the 1970's, G.C. Murphy was losing money. A November 1979 Business Week article was painfully sharp in its analysis of the company's problems, placing a large chunk of the blame on the increased number of Murphy's Marts, which the company was "still trying to assimilate", due to the fact that it "expanded its Mart operations faster than it could control them". The basic contention of the article was that G.C. Murphy had never recognized "that it runs two distinctly different types of retail businesses". That year, major changes were made, including the forced retirement of Murphy's president, who was replaced by Chuck Lytle, a veteran Murphy executive, amiable and extremely well-liked by the troops. The Marts and variety store operations were finally separated into two groups, and advertising would no longer be shared. Interestingly, the Murphy's Mart store footprint would shrink even more, with "the greatest share of the new units (to) be 32,000 sq. ft to 38,000 sq. ft". Eight of the oldest Murphy's Marts, which at an average 90,000 square feet were gigantic by comparison, were shuttered.

Over the next few years there would be a few more closings, both of Murphy’s Marts (some of the weaker performing ex-Grants stores in the South) and of variety stores. The early 1980’s would also see a couple of major retoolings of the Marts, including an attempt to bolster the quality of the apparel offerings (a perennially weak area for the company) and to update the stores’ décor, the early 70’s green , gold and orange having grown stale by that time. In his book, Togyer likens the updated 1984 Murphy’s Mart look to that later adopted by Target, incorporating “expensive-looking displays lit with baby spotlights” as part of interiors “done over in sleek, corporate white with red and blue accents and simple, handsome signs”. These new signs featured a stylized “M” that looked like a neon tube. A November 1983 Chain Store Age article highlighted some new additions to the merchandise mix as well: “Gitano color-fit jeans, Gloria Vanderbilt black denims and Wrangler cords”, all part of an effort to make soft lines “the central focus of the Marts”. Also, it was mandated that the song “Maniac” from the Flashdance movie soundtrack be played on a continuous tape loop in all Murphy’s Mart adult apparel departments.

These efforts (All except for the “Maniac” song loop – I just made that up.) were paying off. According to the same article, G.C. Murphy sales, despite a store lineup of 19 fewer units, were $872 million for 1983, up six percent from the previous year. Profits, however, were up an astounding 56 percent, a feat the magazine credited to the “increased emphasis on the Murphy’s Mart stores”.

At any previous time in the 20th century, this upturn in fortunes might possibly have been seen as the beginning of an exciting new era – at the very least a “mini golden age” for the Murphy organization. But these were the 1980’s, an era in which the old rules of business were rapidly going by the wayside. Murphy was about to become a victim of its own success.

From a business standpoint, the 1980’s were a drama like none that had gone before. “Hostile takeovers” formed the plot, and “corporate raiders” were the villains. The helpless victims were staid, old-line companies with large reserves of cash and little debt, conservatively run and largely owned by “Gram-and-Gramp”-type investors, who faithfully acquired the stock in small amounts and held onto it forever. All too often, there were no heroes in these real-life tales. Under a hostile takeover typical of those that took place in the 80’s, the corporate raider, or “investor”, would target a company and seek to sow discord among its shareholders, charging inefficiency or malfeasance of some sort on the part of the company ‘s board and management. Well-heeled or well-backed, the investor would begin to acquire blocks of the company’s stock, eventually gaining a controlling interest. At that point, sensing the writing on the wall, the remaining shareholders were usually more than willing to sell their shares. All that was left then was for the raider (excuse me, I mean “investor”) to break up the company and sell it off in pieces, usually resulting in a huge profit. It was a scenario that played itself out time and time again through the 80’s. Eventually, government regulations, prosecutions and (just a theory here) a possible latent desire for respect on the part of the raiders caused the trend to wind down. To learn more, you can find any number of books on the subject, or you can just rent the 1987 movie “Wall Street”, which sums the whole sordid thing up remarkably well. (And the hairstyles are awesome.)

To be sure, The G.C. Murphy Company was an old-line, cash rich, low-debt, (very) conservative company, with investor rolls filled with Grandmas and Grandpas. And nowhere were the corporate raiders more brutal than in the retail world. The most (in)famous of these was Herbert Haft, who in the space of a few years went after Safeway, Federated, Stop & Shop, Eckerd, Kroger, Dayton-Hudson and others, leaving very little time for hobbies, I’m sure. None of these takeover attempts succeeded, but in most cases Haft walked away with a pile of cash and left a lot of damage in his wake. Haft’s basic tactic – he’d buy an interest in a company, threaten a hostile takeover, and refuse to back off unless the company bought back his shares at a huge premium, which they invariably did - came to be known as “greenmail”. He apparently considered G.C. Murphy too small to bother with, as there is no record of any advances made toward them.

Others were interested, however. New Jersey-based investor Arthur Goldberg, characterized as “one of Wall Street’s sharks” by Togyer, had acquired 7.5 percent of Murphy’s stock by early 1984. Just prior to that, Murphy proposed a new policy to its shareholders that would have mandated an 80 percent majority of shareholders to approve the dismissal of any member of the board of directors or a merger with another company. Goldberg sought to defeat the proposal, and when he lost, decided to dump his stock. After some hemming and hawing, Murphy management tried to corral a group of investors friendly to the company to buy Goldberg out, almost putting it together, but ultimately falling short. Goldberg sold out to an apparently bigger shark - Irwin Jacobs, a Minneapolis-based investor charmingly known, according to Togyer, as “Irv the Liquidator”. Eventually Jacobs would rack up an astounding 19 percent of Murphy’s common stock, and all of the power that went along with it.

Now having to deal with a new, even tougher adversary, Murphy brass tried to prevail upon Jacobs to sell his shares back to the company. Togyer’s book describes some fairly humorous scenes of facility tours the company hosted for Jacobs, instructing store and distribution center managers beforehand “not to clean up”, the intent being to leave a shoddy impression - convincing Jacobs he’d made a dubious investment and compelling him to sell his stake back to the company, cheap.

Once again, Murphy attempted to put together a coalition to sufficiently finance the repurchase of its stock, and once again, sadly, it failed. On April 13, 1985, the announcement was made that Irwin Jacobs had struck a deal to sell his G.C. Murphy holdings. The buyer? Rocky Hill, Connecticut-based Ames Department Stores. After an agonizing summer filled with offers and counteroffers, legal maneuverings, jockeying for position and considerable fear and loathing, the deal was finally done on August 6. The G.C. Murphy Company, a proud 90 year old organization, one of America’s retail pioneers, was gone.

Off the bat, plans were announced to close nearly one-fourth of the G.C. Murphy variety stores. Ames’ main interest in the transaction was to gain control of the Murphy’s Marts and convert them to Ames units, a process that ended up taking nearly two years. Immediately, however, management responsibility for the Marts was shifted to Rocky Hill, while the variety store division continued to report to McKeesport.

As expected in most any merger situation, considerable vitriol flowed from both sides of the Ames-Murphy’s merger, which the Togyer book and several press articles I’ve read expound in fascinating detail. Murphy partisans described the Ames operation as follows: “Honky-tonk operations…a mess…a terrible store with terrible merchandising…We should have been the one to take Ames over”. A Wall Street analyst “who asked not to be named” (gee, I wonder why…) took up the cause for Ames in a September 1987 New York Times article: “My assumption is that there’s something really rotten at the Murphy’s operation. Ames was beautifully managed all those years before it bought Murphy’s”. (While reading this stuff, the Ramones song “We’re a Happy Family” kept running through my head. Not at all fitting, I know, but it’s like trying to stop thinking about a hippopotamus when a friend dares you that you can’t!)

The variety store division, which in 1989 consisted of 131 G.C. Murphy stores and 25 “Bargain World” outlets was never a fit for Ames and in August 1989, Ames sold it to E-II Holdings, a company controlled by legendary financier Meshulam Riklis. E-II (later called McCrory Corp.) had pretty much become the repository for the five-and-ten biz by that time, with a stable that included McCrory (which had been a Riklis property for decades under his previous company, Rapid-American Corporation), J.J. Newberry, H.L. Green, S.H. Kress, T.G. & Y and Britts, among others. Despite this, Riklis was probably most famous for his marriage to Pia Zadora, an aspiring actress/singer. Riklis had famously invested several of his McCrory millions in an effort to make her a star. I met the diminutive Ms. Zadora in my youth at a record signing at Atlanta’s Lenox Square while visiting my cousins there in ’83 or so, and thought she was nice, and even better looking in person than in all of her ridiculously expensive publicity. At that point I deemed her new single, called “The Clapping Song” if I remember right, to be a non-deleterious issue.

The G.C. Murphy story’s ending coincides with that of the 20th century, upon the folding of its two successor companies. In 2002, McCrory Corporation, last of the variety store operators with a paltry 200 stores left of its “empire” (a handful of which operated under the G.C. Murphy banner to the bitter end), closed its doors for good.

Ames, a fascinating story in and of itself, closed down in August of that same year. Having acquired several large retailers in the 1980’s and 1990’s, including several chains outright – King’s, Murphy’s, Zayre, Hills – and prime locations from a slew of other defunct chains, Ames struggled for years prior to its demise. The prevailing opinion is that Ames finally collapsed under the weight of the Zayre acquisition, finding the assimilation of the stores far more costly and difficult than anticipated.

A few of the former Ames units are first-generation Murphy’s Marts, sitting vacant to this day, just waiting for an enterprising soul to show up and open “Big Murph’s Flea Market”. You never know.

Shown above are Murphy publicity photos from 1973-4. Ok, by the numbers: First, a great-looking “900” series Murphy’s Mart/Acme combination, this one being the first Mart to open in Baltimore. Next up are an exterior view and the inside mall entrance of the Butler, Pennsylvania, location, an “800” store. Note the fine examples of 70’s art to the left of the inside entrance (the paintings, not the cornstalk man). Following are similar views of the DuBois, Pennsylvania location (right, a “700” store – you’re getting this!), with the young lady in the foreground in the de rigueur plaid flares. Last is a “600” store, from Westernport, Maryland, which leaves me at a loss for words. (If I think of any, I’ll edit the post. Don’t wait up.) Below is kind of a strange one, from 1975. A photo of a similar looking facade (sans the happy-looking store crew in the foreground) is featured in the Togyer book and is captioned in a way that leads me to believe it’s one of the former W.T. Grant stores, fitted with a Murphy’s Mart logo that’s an odd throwback to an earlier version.

****A special note to everyone – thanks for bearing with me through the longer stretches between posts lately. I’m working towards resuming my former blistering, frenetic posting pace (haha) that you’ve all grown accustomed to, and to responding to your comments on a much more timely basis. They are wonderful, informative and greatly appreciated as always. One thing I’ve learned, to my horror, is that a number of responses I’ve written to emails I’ve received over the last month or so (which I definitely have attempted to respond to promptly) have apparently not gone through. I’ve had this problem with Hotmail before. I will try to look them up and resend them on another email account. If you have written me recently or were expecting communication from me on something or another, and are sitting there thinking “Wow, Dave’s been one poor correspondent. He’s been too, too hard to find. I guess that means we ain’t been on his mind!”, nothing could be further from the truth. Please drop me another quick line and I’ll resend my original response. (Or I’ll at least apologize like heck!) Thanks again.****

Matchless Memories of Mammoth Mart

The word “mammoth” calls to mind something big, huge, out of the ordinary. So the giant new discount stores must have seemed to folks who were used to shopping at the traditional “five and ten” - type variety stores that were a fraction of their size. It only makes sense, then, that one of these new “discount houses”, the upstarts of the retailing world, would adopt a “mammoth” as its trademark. And when it happened, did they choose an ancient woolly mammoth, with its ultra-long, curved tusks and generally terrifying appearance? Not at all. Instead, they went with a refined, genteel, bi-pedal elephant, smartly dressed in trousers, a sportcoat and tie. This friendly fellow was “Marty”, official mascot of Mammoth Mart, the late, great New England-based discount chain.

Quincy, Massachusetts native Max Coffman, the founder of Mammoth Mart, was born in 1910 to Russian immigrant parents. Coffman was one of those people of whom it could truly be said that retail was “in his blood”. Starting out as a grocery delivery boy, Coffman worked his way through high school and college performing a number of retail jobs. After four years with Enterprise, a Boston-area department store, Coffman joined Union Premier Food Stores, forerunner to Food Fair, where his responsibilities included overseeing the opening of new stores. In 1937, he joined Economy Grocery Stores, parent of Stop and Shop, a leading New England area chain. At Stop and Shop, Coffman’s responsibilities were once again centered on the company’s new store program. It was here that he learned the benefits of self-service, and especially of having a centralized checkout area at the front of the store - a practice that he would help pioneer later on for the discounting field, where it had previously been a foreign concept.

In 1941, Coffman, along with his brother-in-law Henry Gornstein, went into business for himself, opening an Army/Navy surplus store in Quincy. Problem was, with the outbreak of World War II, the supply of military surplus items had dried up, so Coffman stocked a variety of apparel, mainly work clothes, instead. The end of WWII in 1945 unleashed a flood of surplus items to the market, enabling Coffman to open five more surplus stores by 1948.

By the early 1950’s, as discussed numerous times on this site, a new form of retailer was springing up all over the New England area, known in the early days of the business as the “discount house”. Again, as mentioned, these new stores were often located in old, vacated factories that begged for tenants and were available for a song. J.M. Fields, Ann and Hope and Interstate Stores’ (who would later buy out Topps and White Front) first discount operation all began in this mold. While Zayre chose to come out of the box with new construction instead of the “mill building” approach, their merchandising approach bore some similarities to the aforementioned companies. The stores were very simple, often outfitted only with pipe racks and basic fixtures (as these chains became successful, much more sophisticated store designs would follow), but they made money hand over fist. Max Coffman was quick to recognize the potential of this new self-service, volume based, low price approach, and decided it was the route he needed to take.

In March 1956, the first “Mammoth Mart” (originally Mammoth Mills) was opened in a 51,000 square foot former foundry building in Framingham, Massachusetts. Robert Drew-Bear, in his book Mass Merchandising, describes the opening day scene, where there happened to be a “…very heavy snowfall. As a matter of fact, even the large searchlights were buried by the storm. Nevertheless, the buying public came to the store opening and a new era was born for Max Coffman and Mammoth Mart”.

The profitability of his Army/Navy surplus stores paled in comparison with that of the discount store, so Coffman soon closed them down in order to fully devote his resources to opening new Mammoth Marts. Coffman expanded cautiously, especially in the early years. “I wanted to get a good solid foundation established first”, he was quoted in the Drew-Bear book. In 1959, the second Mammoth Mart was opened in Bangor, Maine, with a third unit in Lewiston, Maine the next year. 1961 through 1965 saw the opening of an average of two new Mammoth Marts per year, and also the company‘s first public offering of stock. 1966 was the chain’s “breakout” year, so to speak, with the opening of six units, one of which replaced the original Framingham store.

The Mammoth Marts were located in strip shopping centers (except the free-standing Bangor unit), usually next door to a supermarket. The store size ranged from 42,000 to nearly 90,000 square feet. The stores’ merchandise mix, was heavily weighted towards apparel. In the early years, factory overruns and seconds were stocked. Drew-Bear’s book notes the chain’s private label brands, including “Princess Anne” for their nylon stockings. (Somehow, that just sounds better than “Mammoth” stockings, eh?) The company also operated their own shoe departments, a rarity in the discount industry where they were generally leased out to others. Small appliances, housewares, cameras, records and books helped round out the mix. Another feature of the stores were their snack bars, de rigueur for the time.

As the Mammoth Mart chain grew, so did Max Coffman’s reputation as a respected businessman, a fact acknowledged well outside his company’s New England trading area. In 1967, Coffman received the prestigious Horatio Alger Award, which he accepted that year alongside such other notables as Dr. Michael DeBakey, the famous heart surgeon, Lawrence Welk, and Ewing Kauffman, chairman of Marion Merrell Dow pharmaceuticals and soon-to-be founder of the Kansas City Royals.

Coffman’s retailing savvy also caught the attention of one Sam Moore Walton, operator of a small Arkansas discount chain with a big future. In his autobiography, entitled Made in America, Walton specifically mentioned Mammoth Mart. Sam called on the Mammoth Mart offices and was given a tour of the operation by Coffman’s son Jeffrey, which he recalled in his father’s obituary as reported by the Boston Globe - ''I showed him around," said Jeffrey. ''I was only 20 years old. Who knew what he would become?"

At the end of 1970, Mammoth Mart was in great shape. Seven new stores had been added, bringing the company total to 34. Two were located in Maine, one in Vermont, and the company’s first four stores outside of New England – Bel Air (suburban Baltimore), Maryland and Lumberton, Henderson and New Bern, North Carolina. A childrens’ clothing store division,”Boston Baby”, was started around this time.

On a personal note, Mammoth Mart is special to me because it’s one of a handful of classic retail chains outside of the Chicago area that I shopped at extensively. Throughout the 1970’s, my brother and I spent three or four weeks every August with our grandparents in North Smithfield, Rhode Island, where we frequently shopped at the Mammoth Mart at Park Square, an area of town located just on the edge of Woonsocket. It was located in an “L-shaped” shopping center along with a Star Market. A Kentucky Beef restaurant sat on the edge of the parking lot, which later became a Burger Chef. Many times we’d hit all three in the space of an afternoon. Across the street was an Almacs grocery store, a popular Rhode Island chain.

My favorite part of the Mammoth Mart, of course, was their record department, a welcome sight after those exasperating moments spent in the fitting rooms, trying on yet another pair of corduroys. The record department had a great cut-out bin, where I picked up a number of bargains. Without a doubt, the oddest album I found there was Yoko Ono’s 1973 double-album entitled “Approximately Infinite Universe” on the Beatles’ Apple label. It was a bit on the surreal side for Mammoth Mart – I remember thinking “What an ironic juxtaposition - How incongruent!” (Actually, being 12 or 13 at the time, it was more along the lines of “Man, this is weird!”) I didn't buy the album.

Getting back to the storyline, the retail landscape grew bleak for many discount and variety chains in the early 1970’s. Interstate Stores (Topps and White Front), Arlan’s, and Grants, among others, got into financial trouble, leading to the eventual closure of those chains. The stagflation of the American economy caught many retailers flatfooted, especially those with older stores or less than stellar merchandising. Some chains did well, including Kmart on the national level, and local competitors Ames and Caldor. Unfortunately, Mammoth Mart ended up in the former category.

In June 1974, Mammoth Mart filed for Chapter 11 bankruptcy. The ten “Boston Baby” stores were closed. Happily, (unlike many other chains) the company emerged from it six months later, and shortly thereafter resumed payments of dividends to its shareholders. In April 1977, a “secret suitor” made an offer to buy out the 51-store Mammoth Mart chain. The “secret suitor” was soon revealed to be King’s Department Stores, Inc., a Boston area discounter (ironically founded in 1956, the same year the first Mammoth Mart, and headquartered in Brockton, Mass, Mammoth Mart’s original corporate home) with 121 stores along the eastern seaboard. The deal was finalized in August 1977. Mammoth Mart was no more.

The next year, King’s was set to merge with W.R. Grace and Company, a firm best known for chemical production but had recently acquired a number of retailers – Herman’s World of Sporting Goods, Sheplers Western Wear and Handy City hardware, to name a few. The merger failed to go through, and King’s more or less faded away over the next few years, closing most of its stores, including several former Mammoth Marts. In August 1982, King’s parent company, KDT Industries, went bankrupt, selling its remaining 42 stores to Ames the following year.

Max Coffman, Mammoth Mart’s founder and early discounting pioneer, spent his post Mammoth Mart years in real estate ventures and philanthropy. Mr. Coffman passed away in 2005 at the age of 95.

The North Smithfield Mammoth Mart I referred to earlier was torn down around 1990 (the store, of course, had closed much earlier) along with the Star Market. A Super Stop and Shop was built in their place. The Burger Chef was torn down to make room for expanded parking. The Almacs across the street closed along with the rest of the chain in 1995. A Hollywood Video store and an Ocean State Job Lot (which is actually a very interesting store – I visited it for the first time last year) now occupy the building. Time sure marches on.

And as for “Marty”, the retired Mammoth Mart elephant mascot? Last I heard, he was living a quiet life at his place on the Cape.

The photos above, from a 1962 trade ad, show the brand-new 88,000 square foot Mammoth Mart in Brockton, Massachusetts. Mammoth Mart was headquartered in Brockton, “home of (champion boxer) Rocky Marciano”, as Max Coffman proudly told a UPI interviewer in 1965. The company’s HQ was later moved to nearby West Bridgewater. Here are a couple of links of interest - a list of the Mammoth Mart locations, and a nice photo of the Scarborough, Maine Mammoth Mart circa 1967.

Take Another Look - at Zayre!

(In our case, one last look at Zayre for the time being, with some nice photos from 1981.) Ah, the asterisk. Throughout history, nothing else has etched “Buy! Buy! Buy!” in the mind of the American consumer in quite the same way. Even today, its hypnotic pulling power is employed by a wide range of entities, from gargantuan retailers to well-loved retail fansites. And from the late 70’s through the end of its existence, the asterisk was Zayre’s calling card, with an association that endures even today. For a time, it actually helped.

By the mid-70’s Zayre, a billion-dollar company by that time, was in trouble. Profits were down sharply, stockholders were upset, and Zayre’s image with the buying public was a mess. The country was in the midst of a gloomy recession, which mortally wounded a number of discount retailers. More than a few of Zayre’s problems were self-inflicted, however, as company chairman Sumner Feldberg later admitted, with brutal candor, to the New York Times – “Our stores were not exciting and each did relatively little volume…attempting to stay alive, we squeezed the payroll and this created low operating standards for the stores”.

In a bid to reverse Zayre’s fortunes, the Feldberg family turned the company reins over to an outsider for the first time. In 1978, Maurice Segall, a Canadian-born vice president of the American Express Company and former executive of Steinberg’s, a large Quebec-based grocery/discount chain, was installed as Zayre’s president and CEO. Attracted by the prospect of a turnaround for the Zayre stores, but even more so by the potential of the fledgling T.J. Maxx chain, (a then 12-store Zayre subsidiary launched in 1976)and the 200 Hit or Miss stores, Segall jumped in and set about the task.

One of Segall’s most successful strategies was to strengthen Zayre’s presence in urban markets, which by 1983 contributed nearly 30% of the company’s sales and an astounding 60-plus percent of its profits. Already having a strong established urban base of Zayre-built stores, the company benefited from the flight of other chains from these areas, including one Chicago example cited by the Wall Street Journal, where Zayre took over a May Company-owned Venture store that had just posted a loss on $7 million in sales. After a year of operation as a Zayre, the same store was profitable on nearly double the sales. Smart merchandising played a major part, of course –the company scaled down its home repair and lawn mower departments, owing to the fact that many urban dwellers rent their homes. At the same time, Zayre significantly expanded its apparel offerings in these stores, providing a wide clothing selection for areas where store choices were often limited.

Segall’s master plan for Zayre included some relatively minor tweaking of the company’s geography, coupled with a major revamp of its store mix. Zayre pulled out of the St. Louis and Minneapolis markets altogether. The Warwick Shoppers Worlds, Bell/Nugents, and fabric stores were all disposed of. A major ramp-up of the Hit or Miss and T.J. Maxx store programs was launched, with the T.J. Maxx store count ballooning from 12 to nearly 170 units by 1985.

And of course, there was the “extreme makeover” of the Zayre stores themselves, a forty-million dollar revamp phased in over a four-year period beginning in 1978 (although it had been “previewed” on a couple of stores a year or so earlier). The orange-and-brown rainbow color scheme and the venerable asterisk would become familiar sights in communities (and in TV commercials) throughout all Zayre-dom. It was an outward sign of a new optimism at the now very profitable Zayre. For his efforts, Segall was awarded the chairman’s title as an addition to those he already held in November 1986.

Zayre’s “second golden age” proved to be short-lived, as the virtual bottom fell out in 1988. From a nearly $130 million operating profit the previous year, Zayre posted a disastrous $13.9 million loss. The late 70’s remodels were by now looking old. Zayre had become overly dependent on deep-discounted specials, to the point where customers spurned anything the chain sold at regular price. Most troubling were the apparel lines, where Zayre was losing ground rapidly to Kmart’s Jaclyn Smith line and also to Dayton-Hudson’s growing Target chain and their “Honors” line, an early example of that company’s affordable trendsetting prowess. In a May 1988 article outlining Zayre’s woes, the Wall Street Journal quoted a college student named Marie as she pointed at the Zayre store in Cambridge, Mass. “Look at it,” she said. “If my friends saw me coming out of a place like that, they’d never talk to me again”. Ouch.

By this time, it was clear to most that the real gem of the Zayre organization was the TJX Companies (T.J. Maxx), in which Zayre held an 80% percent stake, having sold a chunk of it to the public in 1987. Talk of a corporate breakup of Zayre began to circulate. It took a hostile takeover attempt by the infamous Haft family to actually bring it about. In August 1988, Herbert Haft announced his family’s intention to buy a major stake in Zayre. In the previous couple of years, the Hafts had made similar runs at Safeway and Stop and Shop, among others, and at the same time they pursued Zayre they had Kroger firmly in their sights as well. In each instance these companies were forced into a defensive position, with Safeway and Stop and Shop being taken private (Safeway later went public again and Stop and Shop would sell out to Royal Ahold) and Kroger forced to restructure. Although the Hafts never ended up controlling these firms, in most instances they walked away with a pile of cash, which was probably their intention in the first place. Zayre’s response was to break up the company. In mid-September, Zayre announced its sale of their discount (Zayre-branded) stores to Ames Department Stores Inc. of Rocky Hill, Connecticut, in a cash and stock transaction.

Ames’ purchase of Zayre made them the third largest discount chain behind Wal-Mart and Kmart, but it placed a tremendous strain on Ames, like “a guppie (sp) swallowing an Atlantic salmon”, to once again quote from the Journal. Ames closed 74 underperforming Zayre stores and (mildly) facelifted the remaining 315. Beyond the name change, which was applied to most but not all Zayre stores to mixed opinion, Ames failed to appeal to Zayre’s small but loyal band of customers in some important ways. They discontinued the Zayre credit card, through which 5.5% of Zayre sales had come, not an insignificant percentage. The tradition of keeping Zayre’s stores open 24 hours a day in the days leading up to Christmas was abandoned. Most importantly, Zayre’s “promotional” approach – special sales, mailed circulars, markdowns and TV ad blitzes was discarded in favor of Ames’ “everyday low price” approach. In April 1990, with the strain of the Zayre acquisition lumped in with the generally poor economy of their core New England market, Ames filed for Chapter 11 bankruptcy, the first of two times they would do so. Two years later, Ames sued the advisers who promoted the Zayre transaction. In 2002, Ames closed their doors for good. The TJX Companies are still going strong.

Just for fun, here are a few Zayre commercials from their “renaissance period” - The “Take Another Look” campaign from 1978, a great 1980-ish Chicago Grand Opening ad featuring the fastest stockers in the world, and a Christmas ad from 1984. And here’s a link to a great post on Eddie’s Rail Fan Page, featuring a great night shot of a 60’s vintage Zayre revamped to the 1978 image, right down to the asterisk door handles! This empty parking lot shot brings back memories of driving home on late winter nights in my early 20's, pondering the great questions of life, like this bit of eighties profundity I read recently (can't remember where) - "Should I stay or rock the casbah?"